The acquisition expands the company’s reach in aesthetics, ophthalmology, women’s health, gastrointestinal, and central nervous system products. This rating is reserved for companies with strong balance sheets and/or excellent dividend histories. This is also higher than the industry average of -9.43. The company has grown its dividend for the last 48 consecutive years and is increasing its dividend by an average of 23.36% each year. This rating is reserved for companies with strong balance sheets and/or excellent dividend histories. https://www.facebook.com/DividendValueBuilder, https://plus.google.com/+KenFaulkenberry/posts, https://www.linkedin.com/profile/view?id=40655833&authType=NAME_SEARCH&authToken=iHyH&locale=en_US&trk=tyah&trkInfo=clickedVerticalmynetworkidx1-1-1tarId1436379949545taskenfaulkenb, Selecting Dividend Stocks With The DVB: How It Works, Leggett & Platt (LEG) Dividend Stock Analysis. HUMIRA is a biologic therapy administered as a subcutaneous injection. This rating is reserved for companies with strong balance sheets and/or excellent dividend histories. The 5-year Dividend Growth Rate is 20.86% which is below the 36.80% earnings growth rate but above the free cash flow rate. Yet, if you buy a stock you own more than âa dividend paying machineâ. Earnings over 5 years have grown at a compound annual growth rate of 36.80%. With revenue and Earnings growing, it shows the potential to keep increasing the dividend in the future. D grade indicates a company in good standing but has issues that could affect its stability and long term risks. However there was a decline in the revenue from Europe due to price cuts due to the patent protection running out in europe. ABBV has a negative debt to equity which means that it is a highly leveraged company. My scoring system is as follows: Based on the quick analysis above ABBV scored a total of 82 out of 100 which ⦠I’m not fond of this rule, but it shows that the company has a dividend paying culture at its core. Consult your financial advisor before making investment decisions. I check at least 5 years to see a better reflection of the earnings power of a company. Still, with a massive drug that will continue to earn profits for years to come, backed by a solid pipeline of new products, AbbVie is positioned to make a lot of money and return a lot of cash flow back to their shareholders. Over the last 5 years the free cash flow has grown from $7 Billion to $12.77 Billion which is a growth rate of 12.8%. D grade indicates earnings quality is poor and requires thoughtful due diligence. The sole purpose of this analysis is information. F grade indicates a company with significant issues that are currently affecting its stability and long term risks. The lower the percentage, the more chance a company will likely keep increasing the dividend. This is essentially the number of times a company can pay its interest with its earnings before interest and taxes. The 11 Factor Dividend Safety Score is examined below: 1. Discover, Evaluate, and Compare Dividend Stocks Without Emotional Bias, AAAMP Position Disclosures:Treasure Trove Twelve – NoneDividend Growth & Income – LongGlobal Dividend Balanced – NoneAggressive Growth Balanced – NoneHigh Yield Balanced – LongGlobal Value – None, Sector: HealthcareIndustry: Drug Manufacturers – Major. The reason is that earnings can be affected negatively or positively by once-off events. ETF's Vs Dividend Stocks? Learn more about Dividend Safety Scores here. Dividend Safety Scores range from 0 to 100. Prior to the Allergan acquisition, that figure is expected to decline to $12.4 billion in 2019. Pharmaceutical maker AbbVie (NYSE:ABBV) has been caught in the downdraft, down 7% since the beginning of the year. Dividend growth. The Acquisition of Allergan is also positive and shows that the company are moving in the right direction. Another major growth driver is the $63 Billion acquisition of Allergen which was finalised in May 2020. AbbVie’s leading drug, Humira (arthritis, plaqque psoriasis, ankylosing spondylitis, Crohn’s disease, and ulcerative colitis), represented over half of the company’s current profits and sales before the Allergan acquisition. We look at both the earnings payout ratio and the free cash flow payout ratio. Scores are available for almost 1,000 stocks and can help you generate safer income. Itâs important to know that a dividend is affordable, especially in times where there is a need to save cash. Can they continue to increase dividends over the next 10 years? Smurfit Kappa Dividend Review -is now the time to Buy? ABBV show very strong signs that they can and will continue to raise their dividend in the future. One of the major risks for pharma companies is patent loss. Dividend Safety Grade: B. “We continue to be very well positioned for the long-term. Learn more about Dividend Safety Scores here. With this in mind, ABBVâs dividend appears Borderline Safe, with a moderate risk of being cut. A score of 50 is average, 75 or higher is excellent, and 25 or lower is weak. Based in North Chicago, AbbVie (ABBV Quick Quote ABBV - Free Report) is in the Medical sector, and so far this year, shares have seen a price change of 1.4%. The trailing twelve month EPS coverage currently stands at 97.09% due to negative impacts from COVID-19. The lower the percentage, the more chance a company will likely keep increasing the dividend. AbbVie Inc. is a research based biopharmaceutical company engaged in discovery, development, manufacture and sale of a range of pharmaceutical products. Copyright © 2021 Engineer my Freedom - Powered by Creative Themes. Dividend Safety Scores range from 0 to 100. Scores of 50 are average, 75 or higher is very good, and 25 or lower is considered weak. A stockâs Dividend Safety Score represents its safety rank relative to all of the other dividend-paying stocks in the market. Best known for⦠Derek; December 8, 2020; Contact Info. In 2019 the EPS Payout ratio was 81%. Disclaimer:While Arbor Investment Planner has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein. Interest coverage is probably one of the most important metrics that I use. B grade indicates a very low probability for a dividend cut. However if earnings is growing at a faster pace than dividend growth it may not be a huge problem. We put the most weight into the dividend payout ratio as it is the single best method of determining if a company is generating sufficient income to pay its dividend. This acquisition should reduce the burden on HUMIRA in terms of the revenue percentile over the next couple of years. Our Safety Score answers the question, âIs the current dividend ⦠A blog in the Arbor Investments Planner Network. This tells you what percentage of the company’s EPS is being used to fund the dividend. Most of these stocks have increased their dividends for more than 10 consecutive years, and each one has a high Dividend Safety Score above 60, ⦠This is a rel concern for AbbVie as their patent protections will run out by 2023 on their flagship HUMIRA product. C grade indicates a low probability for a dividend cut and/or average safety risk. In 2019 the payout ratio was 50% and the 5-year average is 47%. I estimated the companies fair value to be around $130 using a DDM and DCF model which means that at today’s current price they could undervalued. It is calculated by dividing a firm’s total liabilities by total shareholders’ equity. C grade indicates earnings quality is acceptable or average. I personally put more weight on the payout ratio that is calculated from cash flow. This tells you what percentage of the company’s free cash flow is being used to fund the dividend. With this in mind, ABBVâs dividend appears Borderline Safe with a moderate risk of being cut. Results from key growth products – including Skyrizi, Rinvoq and Ubrelvy – continue to track ahead of our expectations, our aesthetics portfolio is demonstrating a strong V-shaped recovery, our hematologic-oncology franchise is delivering double-digit growth and we’re advancing numerous attractive late-stage pipeline programs. Normalized Diluted Earnings Per Share (TTM): $4.73Cash Flow From Operations (CFO) Per Share (TTM): $10.01Free Cash Flow Per Share (TTM): $9.58, Buy Price Based on Required Margin of Safety = $100(Required Margin of Safety Based On Risk Stability Grade:A = 10%, B = 20%, C = 30%, D = 40%, F = 50%). To determine the safety of the dividend different types of a Dividend Safety Score exist. Based in North Chicago, AbbVie (ABBV) is in the Medical sector, and so far this year, shares have seen a price change of -29.01%. Investors should complete comprehensive due diligence before investing. AbbVie puchased Allergan (AGN) for $63 billion in cash & stock. ABBVâs long-term dividend and fundamental data charts can all be seen by clicking here. This is the Dividend Value Builder. ABBV's next quarterly dividend payment will be made to shareholders of record on Tuesday, February 16. This can have a huge burden on cash flow which in turn may affect the cash left over to pay a dividend. One of the first metrics I look at for ABBV dividend safety is the payout ratios. With this in mind, ABBVâs dividend appears Borderline Safe with a moderate risk of being cut. Dividend Safety Scores range from 0 to 100. While thatâs a short track record, the pre-split legacy dividend growth track record dated back d⦠The company has increased its dividend for seven consecutive years, which goes back to the spin-off. However it is quite likely that a company that has dividend aristocrat status will continue to keep increasing dividends if they have the means to do so. What Is Better? Dividend Safety Scores range from 0 to 100. Over a long period of time, if dividends continue to outpace the free cash flow then it may have an impact on the dividend. Technically AbbVie has only existed since 2013 when it was spun off by Abbott Labs. AbbVie Dividend Safety: 74% = 4/5 Above-Average The Dividend Kings Safety Model Is based on 58 safety metrics (up from 55 in the last ABBV video). I prefer the number to be above 3 or the industry average but the higher the number the better. The company received a Dividend Safety Score of 78, which is excellent and places it in the top quartile of dividend-paying stocks. Just because a company has historically paid a dividend, does not mean that it will continue to pay them in the future. The AbbVie dividend has been paid continuously since 1924 and increased for 48 consecutive years; qualifying the company as a Dividend Aristocrat. if you liked this review than please consider signing up to my newsletter below, Address304 North Cardinal St.Dorchester Center, MA 02124, Work HoursMonday to Friday: 7AM - 7PMWeekend: 10AM - 5PM. For the time being, AbbVieâs dividend payment is extremely safe. Require an extremely large margin of safety for F rated stocks when purchased. Free cash-flow has grown from $7 billion in 2015 to $12 billion in 2019. 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